GenTech Holdings Inc (OTCMKTS:GTEH) could be an increasingly interesting OTC name following its acquisition of Sinfit Nutrition in June. Sinfit, it should be noted, is a top five functional foods brand sold in over 2,500 GNC locations in North America and over 10,000 global physical and e-commerce stores across more than 10 countries around the world.
That’s become the key to this story. And it appears to be driving serious and appreciable growth into gear even if the market doesn’t seem to be prioritizing that idea at the moment. As Baruch and Buffett have both expressed, the market is a voting machine in the short run and a weighing machine in the long run. In other words, if this data coming from the company over recent months is for real, the shares will likely have their day.
Last quarter’s data is important in establishing that context, with over $300k in Purchase Orders for the three months ended July 31, with $151,630 booked as gross sales (both Company records), total assets as of July 31 stood at $446,959 (versus $48,351 as of April 30, 2020), representing an increase of 824% on a sequential quarterly basis and 2,200% annually, cash up 2,580% on a sequential quarterly basis, and up over 6,700% annually, inventory valued at $62,500 as of July 31, and accounts receivable valued at $86,293 as of July 31.
In response, the company’s CEO, David Lovatt, noted that, “in simple terms, our total liabilities held steady from April to July while our total assets grew by over 800%. We anticipate this growth to continue and likely accelerate over the coming twelve months. And we continue to project a potential for over $3 million in sales in 2021, which is simply an extrapolation from our current performance and recent growth trend.”
Now, on top of that context, we have a new and interesting announcement to digest.
Part of that growth has been the big distribution network (the footprint) that Sinfit enjoys. There are lots of points of sale and lots of distributor relationships.
Adding to that idea, this morning, GenTech Holdings Inc (OTCMKTS:GTEH) announced that SINFIT Nutrition has partnered with Wheelpay™ (www.wheelpay.com) to supply Crossfit™ Gyms (www.crossfit.com) throughout the USA.
According to the release, SINFIT Nutrition has secured a partnership with WheelPay so that they can supply CrossFit Gyms across the USA with the entire SINFIT range of products. WheelPay currently services 6,000 of the 13,000 CrossFit gyms and are expanding their reach further into the CrossFit gym market as well as into other exercise franchise and affiliate marketplaces.
In other words, this is a substantial addition to Sinfit’s already vast distribution footprint, bringing in another 6,000 potential points of sale for its functional foods products.
Harold Vaca, National Sales Manager at SINFIT, stated “Having worked with the CrossFit scene for the last three years at the National and Regional levels, it has allowed me to better understand the needs of the CrossFit athletes, how their bodies work and how they recover. We are very proud to be partnering with WheelPay.com and the team there as well as having the ability bring our full range of delicious functionals foods to so many CrossFit Gyms across the country and provide them with healthy options to fuel their bodies.”
Quality, Scale, and Context
The release goes on to note that SINFIT branded products registered over $2.5 million in global sales in 2019, and are now approved for sale and available for purchase on the Walmart.com and Amazon.com e-commerce platforms as well as in over 2,500 GNC locations in North America, True North Nutrition in Canada and in over 10,000 global physical and e-commerce stores across more than 10 countries around the world.
Wheelpay’s Co-Founder, Kevin Todd, recently commented that they were “proud to partner with Companies like SINFIT Nutrition that provide innovative and unique products to our WheelPay affiliates and athletes across the country.”
We would add here that the company points out positioning as a major factor – as is generally the case. SINFIT products are extremely well-positioned relative to its market peers and to the long-term macro tailwind defining the functional foods market, which saw sales top $267 billion in February of this year on a global basis, with sales in the US reaching $63 billion, according to Euromonitor 2020.
And that’s a powerful context. This trend is part of a larger supportive momentum in the general category, with global sales of organic food and drink topping $105 billion in 2018 (Ecovia 2019). U.S. organic food sales also reached $47.9 billion, up 5.9% in 2018 (OTA 2019). In 2019, 77% of U.S. adults used dietary supplements, an all-time high (CRN 2019). U.S. supplement sales are estimated to have reached $49.3 billion in 2019, up 6.2% (NBJ 2019).
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